Felipe L. Gozon, GMA7 chairman, told reporters that Senate Bill No. 3316, or An Act Amending the Charter of the People's Television Network, is "very, very unfair" because unlike private broadcast companies, PTV4 enjoys state subsidy.

"It would be as if GMA7 is financially supporting its competitor through taxes, which the company diligently pays for. If PTV4 wishes to sell airtime, the government-owned [station] must give up the subsidy it receives in order to level the playing field," Gozon said.

The bill aims to modify Section 19 of Republic Act No. 7306, allowing PTV4 to generate income through advertising and airtime sales. PTV4 would receive a P5-billion capital infusion from the national government, of which P2 billion shall be taken from the proceeds of the privatization of Radio Philippines Network and Intercontinental Broadcasting Corp.

Another P2 billion will be taken from the incremental increases of the spectrum user’s fee of the National Telecommunications Commission, while the remaining P1 billion will be sourced from the General Appropriations Act.

In a letter to Senator Gregorio Honasan, who chairs the Committee on Public Information and Mass Media, GMA7 vice president for legal affairs Ma. Luz P. Delfin said the proposed revenue-making capabilities of the government station would unfairly compete with private business.

"The revenue-generating power granted to it by SB 3316, coupled with the proposed exemption from the remittance of corporate dividends, can potentially tilt the scales heavily in favor of PTV4, to the damage and injury of private broadcasters," Deflin said.

"However, it is not simply the entry of PTV4 as a competitor in the advertising market which is a cause of concern. A greater apprehension arises from the fact that PTV4 wields an unfair advantage over commercial broadcasters because of its unique position which allows it to tap government resources and the public debt," she said.

"The state-funded competitor can provide airtime value at lower rates which may diminish the ability of private broadcasters to attract ad revenues. Sponsors and advertisers may be enticed by the offer of reduced airtime costs and accordingly place their ads in PTV4 instead of investing with commercial broadcasters which may not be able to match PTV4’s low but subsidized ad rates," Delfin said.

Instead of a commercialized network, PTV4 should adopt the broadcasting models of Japan’s Nippon Hoso Kyokai (NHK) and the United Kingdom’s British Broadcasting Corp (BBC), both of which are funded through TV license fees paid by viewersm, Delfin said.

"Without relying on advertising revenue, they are able to sustain their operations and have been blazing a trail for almost a century. It is therefore apparent that a public broadcasting company can succeed and survive with minimal or almost no commercial activities to supplement its public funding. What the BBC and NHK models prove is that PTV4 need not engage in advertising and airtime sales to operate," she added.

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